A SURVIVAL GUIDE TO ‘REDUNDANCY SEASON’ IN THE CITY

Jan 9, 2014

Deutsche Bank’s announcement earlier this month that it was scaling back its commodities division with the expected loss of around 200 jobs, reminded us all that redundancy season in the City was in full swing.

Traditionally, the season of ‘goodwill to all men’ witnesses big job losses across the City. Cynics claim the timing means employers can escape from paying out end of year bonuses.

Arpita

Employment law specialists Arpita Dutt and Polly Rodway, of top City solicitors BDBF, offer some seasonal advice and tips if your career in the square mile suddenly comes to an untimely end.

For most of us December, with festivities looming, is the season to be jolly. But for some City workers it can be the season to be job searching.

Sadly, an increasing number of employers see the prospect of New Year as an opportunity to trim the workforce by announcing redundancies.

This tends to happen at this time of year in the City just before bonuses are announced or paid out.

Generally speaking, employees working in Great Britain who have sufficient service (one year if their employment started before 6 April 2012 and two years if their employment started on or after 6 April 2012) can challenge redundancy by way of an unfair dismissal claim.

However, worryingly this right may not apply to employees who are assigned overseas – an increasing trend in global organisations.

So, as it’s the season of goodwill we’ve decided to share our top tips to help you emerge from the redundancy process in as good a shape as possible, even if you are working overseas.

•Do your homework: check what your contract, company policies, and any relevant collective agreement say about redundancy. They might refer to a right to enhanced redundancy pay (over and above statutory entitlement) or fixed procedures. If so, make sure that your employer is doing what they are supposed to do. Also check bonus and share schemes – they might incorporate “good leaver” terms if you are dismissed for redundancy.

•Phone a friend: most employers allow employees to be accompanied at redundancy “at risk” meetings by a colleague or trade union representative. If you aren’t told that you can be accompanied at an “at risk” meeting, ask. Bring along someone you trust and who you can rely on to take a detailed note. This will help you keep an accurate record of the meeting and enables you to properly engage in the consultation process. If your employer’s notes are inconsistent with your own (or your companion’s), ask your employer to put a copy of your notes on file.

•Question time: in order to fairly dismiss for redundancy, your employer should consult with you about the redundancy situation and consider alternative roles. If you have any questions during the consultation process, ask them. Key issues to look for:

Have you been told why your role is at risk? Does it make sense?

Have you been told who else is at risk? Has one of your colleagues been “missed out”?

Do you think that other people should have been included in the pool?

Do you think that your employer should have considered “bumping” (i.e. removing others from their roles so that you can fill their vacancy)?

Have you been told about all existing vacancies (including roles that are junior/senior to yours)? Have you been given a fair opportunity to apply for those roles?

Have you seen the selection criteria for alternative roles? Do you think they are fair?

Is there a job vacancy that you haven’t been told about?

• It’s a numbers game: if your employer is proposing to make 20 or more employees redundant in a period of 90 days, then they have additional collective consultation obligations. If they fail to comply with these obligations, you may have an additional claim for up to 90 days’ pay. As a result of a recent case, all proposed redundancies across the business (rather than at specific locations) should be counted when determining whether the obligation has been triggered. This means that often the obligation will be triggered without employees knowing about it. If you think this is the case, tell your employer.

• Is there another reason?: employers often view “redundancy” as the easiest way to exit an employee. For that reason, a redundancy process can be used to cloak more sinister acts (even discrimination or repercussions of whistleblowing). If this is the case, you may have additional more valuable claims against your employer beyond a claim of unfair dismissal. If you suspect discrimination or other unlawful acts, or you think that redundancy is being used to “mask” another reason for your exit, make a careful note of anything that is said or done which supports your allegation. This can be used as evidence later down the line.

•Appeal: as part of the redundancy process you should be given a right of appeal. Exercise your right to do so. Make sure your appeal is submitted in time and identifies the specific issues you have with the redundancy process or decision.

The Expatriate Dilemma
A redundancy situation is tough for anyone. However, for employees assigned to work outside of Great Britain, the prospect of job cuts on their return can be even more of a concern as the ability to challenge redundancy by way of an unfair dismissal claim may not be available.

This is because of the limited territorial scope of the legislation which establishes the right to claim unfair dismissal. Generally speaking, under that legislation (and as a result of a chain of cases on the issue) only a limited category of employees working outside of Great Britain will accrue the right to claim unfair dismissal in Great Britain.

For those who don’t fall in specific categories of worker (such as employees working in a territorial political or social enclave or posted overseas for the purpose of a business in Great Britain – e.g. being a foreign correspondent in a newspaper), the employee must show that they have a sufficiently strong connection with Great Britain in order to accrue the right to claim unfair dismissal.

Whether or not there is a sufficiently strong connection between the employee and Great Britain depends on the facts. Relevant issues may include:

Where the employee calls “home”;

The currency of their salary/benefits;

How long they have been outside of Great Britain and how often they return; and

The jurisdiction in which issues relating to their employment have been handled.

If the employee cannot establish a strong enough connection and doesn’t fall into any of the specific categories, they will not be able to claim unfair dismissal in Great Britain. This means, unless they have accrued rights elsewhere, the options for legal recourse following redundancy are worryingly limited. For that reason, and given the tricky nature of the law in this area, expatriate employees facing (or in fear of facing) redundancy on their return to Great Britain should seek legal advice. Equally, employees being offered an overseas assignment should consider taking pre-emptive advice on their contract to ensure that their rights are protected.